Despite Revenue Gains American Airlines Reports Net LossJuly 19, 2012 By: Newswire Travel Agent
AMR Corporation, the parent company of American Airlines, Inc., reported second quarter revenue of $6.5 billion, an increase of 5.5 percent year-over-year and the highest quarterly revenue in company history and a net profit of $95 million, excluding reorganization and special items – a $381 million improvement over the second quarter of 2011. AMR incurred a net loss of $241 million compared to a net loss of $286 million in the same period of 2011, primarily due to bankruptcy costs.
"Our revenue performance has topped the industry for several months, leading to our first second quarter profit in five years excluding reorganization and special items," said Tom Horton, AMR's chairman and chief executive officer. "And this improvement reflects only a fraction of our ongoing restructuring progress. While there is still much to be done, we expect this momentum to build quickly as the new American re-emerges as an industry leader."
The company said its revenue performance was driven by year-over-year yield improvement and a higher consolidated load factor of 84.5 percent – a record for any quarter as well. Domestic unit revenue improved 8.6 percent in the second quarter versus the same period last year and, for the second consecutive quarter, the company experienced unit revenue increases across all five of its hubs. These results were supported by strong corporate revenue growth, AA said.
International unit revenue increased 9.0 percent in the second quarter, driven by increased load factors across all entities, AA said, along with strong yield performance. Premium cabin demand improved significantly in both the Atlantic and Pacific entities, generating unit revenue increases of 8.5 percent and 18.1 percent, respectively. American and its joint-business partners, British Airways and Iberia over the Atlantic, and Japan Airlines over the Pacific, have gained momentum in attracting high-value customers to the airlines' enhanced networks. The Latin American entity posted a 6.7 percent unit revenue increase in the second quarter of 2012, including yield improvements in Mexico and Central and South America.
"Our improved financial results were driven by strong unit revenue performance, with growth outpacing the industry in each of the three months of the second quarter," said Bella Goren, AMR's chief financial officer. "Our consolidated unit revenue rose 9.1 percent, with increases across all five of our hubs and across all international entities. These industry-leading year-over-year revenue increases reflect the strength of our network and alliances, our focus on the customer, and the effectiveness of our overall strategy."
The second quarter 2012 results include $336 million in special charges and reorganization items, AA said.